Moscow, Jan. 28: Kazakhstan has reached an agreement with an international consortium led by ChevronTexaco over the financing of a major oilfield, ending a dispute that had embodied the clash of ambitions between foreign investors and post-Soviet oil states.
The dispute arose in November, when the Western companies in the consortium sought to finance a $ 3.5 billion expansion of the Tengiz oil field in western Kazakhstan, the largest single oil development in the Caspian Sea basin, using the project's oil revenues. The Kazakhstan government protested, saying the plan would bite into its tax receipts. The consortium responded by shelving the expansion plan.
Months of talks produced a settlement that was first made public on Saturday, when the consortium said in a statement that it would “immediately lift the suspension and reactivate expansion.”
ChevronTexaco’s vice-chairman, Peter Robertson, said in a statement that the two sides had agreed on “a funding plan that would provide for the diverse financial needs of the partners.”
The conflict reflected the growing confidence of the Kazakh state and its changing relationship with foreign investors. In the early days of independence, the government, still inexperienced in the ways of capitalism, bent over backward to attract foreign capital and expertise, signing contracts that Kazakh officials now say are too favourable to the oil companies.
A decade later, after foreign companies had invested more than $ 10 billion in expanding and modernising Kazakhstan’s oil and gas industry, Kazakhstan feels that it is in a much stronger bargaining position. It now has an investment-grade credit rating, a seal of approval that even Russia has yet to achieve. And the time has come, officials say, for the country to begin claiming more of the fruits of development.
For their part, the Western oil companies said they saw no reason to rewrite contracts they had been relying on since 1993. The Tengiz consortium’s contract provided for paying for expansion from oil revenue, the companies said.